Complainant

Respondent

Parties

Lianne  Lacken Williams

Alfrank Designs Limited

Representatives

Setanta Landers Setanta Solicitors

Barry O’Mahony BL instructed by Paula Walshe Arag Legal Protection Limited

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under Section 8 of the Unfair Dismissals Act, 1977

CA-00055344-001

01/03/2023

The Complainant commenced her employment with the Respondent on 3 July 2018. She was employed as a Sales Manager with an annual salary of €52,000 plus benefits. She stated that she was dismissed by the Respondent on 5 January 2023, on purported redundancy grounds, which she asserts were unfair.

The Complainant stated that she began to experience issues with her employment in or around 2020, following her appointment as Sales Manager. Specifically, issues arose involving another employee, Mr Myles Campion who took credit for sales which were secured by the Complainant with a particular client.

In or around May 2022, the Complainant was due to attend a trade show in Milan and had scheduled client meetings in advance. Mr Alan Sweeney, CEO subsequently informed the Complainant that she would not be attending the trade show in Milan, and ‘that was that’. The reason given by Mr Sweeney at the time was a lack of company resources. The Complainant subsequently discovered that Mr Campion had attended the trade show on the Respondent’s behalf instead of her although he had not been previously scheduled to attend. The Complainant approached Mr Sweeney to discuss this matter with him and was instructed to raise it instead with her line manager Kate Byrne.

On or around 8 June 2022, the Complainant approached Ms Byrne in the office to discuss the matter as she had not responded to her email. Ms Byrne refused to engage with the Complainant, and instead stared out of the glass wall of her office and ignored her. Ms Byrne then laughed at the Complainant when she became upset.

On or around the 9 June 2022, the Complainant raised this incident with Mr Sweeney over Whatsapp, and indicated that she was working in an environment where she was being shouted at in front of other colleagues and being reduced to tears in the office.

On 6 July 2022, the Complainant sent an email to Mr Sweeney and to Mr Frank Carroll, the owner of the Respondent. In this email, the Complainant set out her history with the Respondent, and indicated that the current environment in the office was one where she was ‘met with a wall of resistance and a level of disrespect and hurt’ which she had never experienced in her career. The Complainant indicated that her desire was to remain a part of the Respondent’s team, but that she could only do so if steps were taken to resolve the issues she was experiencing in the company. The Complainant subsequently met with Mr Sweeney on or around 14 July 2022 and it was put to her at this meeting by him that her email of the 6 July 2022 was merely about ‘how wonderful she was and all the work that she did while everyone else did nothing’. The Complainant was then asked by Mr. Sweeney whether she would leave the company if he made some cash available.

Mr Sweeney subsequently responded by email stating that he had investigated the matters brought up by the Complainant and had found no basis for her concerns. From this point onwards, after raising what was in effect a grievance regarding her treatment by other members of staff in the company, the Complainant stated that she began to be effectively managed out of her role. At least twice a week, she stated that she approached Mr Sweeney to discuss her sales progress and any sales leads which she wished to follow but was informed on each occasion by Mr Sweeney that he had no time to speak to her.

In addition, in or around 7 November 2022, the Complainant arrived at the office to discover that Mr Sweeney and Mr Campion were attending a furniture show in Brussels. The Complainant had previously asked whether the Respondent would be attending the show and was informed that they would not be. It was at this point that the Complainant was informed by an industry contact that Mr Campion was being introduced as the Respondent’s Sales Director at trade shows – essentially, being introduced as the Complainant’s role. The Complainant was also asked by these industry contacts why she had left the Respondent.

The Complainant went on certified sick leave on 28 November 2022 but was still working in a partial capacity. She did not receive any materials regarding the Respondent’s grievance policy and was instead asked “If I make money available, will you leave” in or around 4 December 2022 by Mr Sweeney during a phone call. He stated that the amount would be in line with her statutory entitlements. The Complainant requested this to be put in writing and it was at this stage when redundancy was first mentioned.

By email of 19 December 2022, the Complainant requested the proposal for the redundancy in writing as well as a copy of the company grievance policy. By email of 22 December 2022, Mr Sweeney provided the company grievance policy and informed the Complainant that he was unable to confirm the redundancy package in writing as Frank Carroll, the Respondent’s owner, was not in the office.

By email of 4 January 2023, the Complainant wrote to the Respondent, requesting advice on when the proposal would be available in writing. By email of 4 January 2023, Mr Sweeney responded that he had since left the Respondent company and had forwarded her request onto Mr Graham Carroll. Mr Carroll contacted the Complainant on 5 January 2023 and informed her that the Respondent company would be undergoing a reorganisation, and as such she was being made redundant.

Mr Graham Carroll, the Respondent’s Commercial Director, stated that the Respondent endured a very difficult trading period over the past few years. Specifically, the pandemic closed many businesses, the Respondent’s biggest customer went into liquidation and the disruption in the supply chain, as well as fluctuating shipping rates, and general unease in the market had a hugely adverse effect on the business.

After consultation with external financial advisors in mid 2022, a restructuring of the business was strongly advised, which included an immediate cost reduction plan. This plan necessitated a significant reduction in payroll costs and the Complainant’s role was part of this because she was the most recent employee appointed to a sales role. It was also highlighted that the Respondent’s turnover had reduced from in or around €8,000,000 to €2,500,000 over the preceding years and that from August to December 2022, there was a very significant possibility that the company would be placed in liquidation. Mr Carroll also stated that the Respondent’s staffing levels reduced from 12 to 9, namely a 25% reduction in staff, which in turn reflected a 45% reduction in staff costs. In addition, the consultancy agreement with Myles Campion was ended in November 2022.

It was also highlighted that the Complainant sought redundancy/severance in the first place when she inquired of same in a conversation with Alan Sweeney, former CEO of the Respondent, in early December 2022 wherein she also informed him that she was talking to the competitors of the Respondent with a view to seeking employment with them. Mr Sweeney also highlighted in evidence that he sent an email to the Complainant dated 22 December 2022, where he stated: ‘I know that we spoke about redundancy over the phone following your request a few weeks previously if there was a severance package available to you, unfortunately I am not in the position to confirm in writing right now – Frank is not currently in the office to discuss.’ The Complainant replied to this email on 4 January 2023 seeking details of her redundancy package in writing. As Mr Sweeney was no longer employed by the Respondent at that point, he passed the email onto Graham Carroll, Commercial Director.

By email dated 5 January 2023, Mr Carroll informed the Complainant that her role was redundant and provided details of the redundancy payment, as well as any outstanding annual leave owing, in addition to the fact that the Complainant would be paid 4 weeks’ pay in lieu of notice. The termination of employment email of 5 January 2023 also referred inter alia to the Complainant’s desire to be made redundant, and stated as follows: ‘It is with genuine regret that I have to inform you that as part of this restructuring, your role is also being made redundant. I understand that you had previously asked Alan to look at this for you so I hope this will not settle this issue favourably for you.’ The Respondent asserted if the Complainant believed that the redundancy as set out did not ‘settle matters favourably’ for her, she could have, had she so wished, contacted the Respondent to discuss the matter further.

The Law

Section 6 of the Unfair Dismissal Act states inter alia

 (1) Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.…

(3) Without prejudice to the generality of subsection (1) of this section, if an employee was dismissed due to redundancy but the circumstances constituting the redundancy applied equally to one or more other employees in similar employment with the same employer who have not been dismissed, and either—

(a) the selection of that employee for dismissal resulted wholly or mainly from one or more of the matters specified in subsection (2) of this section or another matter that would not be a ground justifying dismissal, or

(b) he was selected for dismissal in contravention of a procedure (being a procedure that has been agreed upon by or on behalf of the employer and by the employee or a trade union, or an excepted body under the Trade Union Acts 1941 and 1971 as amended by the Industrial Relations Act 1990, representing him or has been established by the custom and practice of the employment concerned) relating to redundancy and there were no special reasons justifying a departure from that procedure, then the dismissal shall be deemed, for the purposes of this Act, to be an unfair dismissal.

(4) Without prejudice to the generality of subsection (1) of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, not to be an unfair dismissal, if it results wholly or mainly from one or more of the following:

…

(c) the redundancy of the employee,  

(6) In determining for the purposes of this Act whether the dismissal of an employee was an unfair dismissal or not, it shall be for the employer to show that the dismissal resulted wholly or mainly from one or more of the matters specified in subsection (4) of this section or that there were other substantial grounds justifying the dismissal.

(7) Without prejudice to the generality of subsection (1) of this section, in determining if a dismissal is an unfair dismissal, regard may be had, if the adjudication officer or the Labour Court, as the case may be, considers it appropriate to do so—

(a) to the reasonableness or otherwise of the conduct (whether by act or omission) of the employer in relation to the dismissal, and

(b) to the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure referred to in section 14(1) of this Act or with the provisions of any code of practice referred to in paragraph (d) (inserted by the Unfair Dismissals (Amendment) Act 1993) of section 7(2) of this Act.”

Section 7 of the Redundancy Payments Act, 1967, as amended, states:

“(2) For the purposes of subsection (1), an employee who is dismissed shall be taken to be dismissed by reason of redundancy if for one or more reasons not related to the employee concerned the dismissal is attributable wholly or mainly to—

(a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased or intends to cease, to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business for employees to carry out work of a particular kind in the place where he was so employed have ceased or diminished or are expected to cease or diminish, or

(c) the fact that his employer has decided to carry on the business with fewer or no employees, whether by requiring the work for which the employee had been employed (or had been doing before his dismissal) to be done by other employees or otherwise, or

(d) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done in a different manner for which the employee is not sufficiently qualified or trained, or

(e) the fact that his employer has decided that the work for which the employee had been employed (or had been doing before his dismissal) should henceforward be done by a person who is also capable of doing other work for which the employee is not sufficiently qualified or trained.”

Findings:

According to the evidence presented by the Respondent, the Complainant was dismissed on the grounds of redundancy. Specifically, the Respondent’s witnesses claimed that the Complainant's role was no longer required and that cost-cutting measures were necessary due to a downturn in business. It is evident from a review of the relevant case law however that when redundancy is cited as the reason for the termination of employment, it is necessary not only to satisfy the definition of redundancy but also to demonstrate that the Complainant was fairly dismissed.

In the instant case, I noted that no alternatives to redundancy were presented by the Respondent to the Complainant prior to issuing her notification of dismissal her on 5 January 2023. There is a significant body of case law to support the contention however that an employee is unfairly dismissed in circumstances where either there was no consultation or it was deemed to be inadequate and where alternative options were not examined, which I opened to the Respondent at the hearing, namely Patricia Fleming v Sodexo (ADJ-00032053), Kaye McDonald v. Sodexo (ADJ-00032098), Thomas Anglim v Coachbury Taverns (ADJ 31165) Trinity College v Ifitkhar Ahmed (UDD 2031)

Mr. O'Mahony BL provided a compelling post-hearing submission in which he asserted that in the instant case a consultation process took place between the parties in the weeks and months prior to the Complainant's dismissal. Specifically, he argued that it was evident from this process that the Complainant expressed a clear desire to leave, and that any further consultation with her would have been futile, citing the cases of Polkey v AE Dayton [1987] IRLR 503 and Saul v Mahony Manufacturing Signs to support his argument in this regard.

While I accept his argument that a consultation process “of sorts” (my words) did in fact take place and it is clear from the email of Alan Sweeney, the Respondent’s CEO at the time, to the Complainant on 22 December 2022 that there were some discussions with the Complainant around redundancy, I am of the view that the process was short-circuited by the Respondent when the Complainant’s employment was terminated on 5 January 2023. Specifically, I find that no evidence was presented to suggest that the Respondent engaged meaningfully with the Complainant and explored alternative options before deciding to dismiss her on the grounds of redundancy. It appears that the decision was solely based on the fact that her role was deemed redundant and because she had inquired about the possibility of an exit package.

If the Respondent had engaged in a proper consultation process and sought to to avoid dismissing the Complainant, they should, in my view, have discussed in the first instance the possibility of her resuming the role of Account Manager, given that she had previously worked in this role only three years before and two of the employees still working with the Respondent are currently employed as Account Managers there. While I accept that the Complainant may not have agreed to resume her previous role, which would likely have involved a reduction in salary for her, the Labour Court held in the case of Component Distributors (CD Ireland) Ltd v Brigid (Beatrice) Burns UDD1854, referred to in ADJ-00032053 and ADJ-00032098 above, that “all available options” should have been examined by theRespondent.  Other options that were open to the Respondent included temporary lay-off or the placing of the Complainant on short-time.

My view that the consultation period should have been more comprehensive is also consistent with the Labour Court decision in Student Union Commercial Services v Traynor UDD1726, also referred to in ADJ-00032053 and ADJ-00032098 above, where no evidence was presented “to demonstrate that the Respondent carried out a thorough exercise to consider alternative options/suggestions. The Court can accept that had such an exercise being carried out it may not have identified any alternative positions suitable to the Complainant, however, it seems clear that no such exercise was engaged in. On that basis the Court finds that the approach adopted by the Respondent was somewhat arbitrary and therefore by reference to Section 6(7)(a) of the Act, the dismissal of the Complainant was unfair.”

As well as the failure to adequately consult and engage with the Complainant, I also note that there was no avenue of appeal provided to her when she was informed on 5 January 2023 that there was no position available for her. Such a process could have given her the opportunity to defend her future employment and highlight her willingness to work in alternative roles, especially in circumstances where she was notified of the termination of her employment in writing rather than in person.

Considering all of the foregoing, I find that the Complainant was unfairly dismissed in light of the Respondent’s breaches of 6 (7) of the Unfair Dismissals Acts 1977 -2015.

Section 7 of the Unfair Dismissals Act, in relevant part, states that:

(1) Where an employee is dismissed and the dismissal is an unfair dismissal, the employee shall be entitled to redress consisting of whichever of the following the adjudication officer, considers appropriate having regard to all the circumstances:

(a) re-instatement by the employer of the employee in the position which he held immediately before his dismissal on the terms and conditions on which he was employed immediately before his dismissal together with a term that the re-instatement shall be deemed to have commenced on the day of the dismissal, or 

(b) re-engagement by the employer of the employee either in the position which he held immediately before his dismissal or in a different position which would be reasonably suitable for him on such terms and conditions as are reasonable having regard to all the circumstances, or

(c) (i) if the employee incurred any financial loss attributable to the dismissal, payment to him by the employer of such compensation in respect of the loss (not exceeding in amount 104 weeks remuneration in respect of the employment from which he was dismissed calculated in accordance with regulations under section 17 of this Act) as is just and equitable having regard to all the circumstances, 

(2) Without prejudice to the generality of subsection (1) of this section, in determining the amount of compensation payable under that subsection regard shall be had to—

(a) the extent (if any) to which the financial loss referred to in that subsection was attributable to an act, omission or conduct by or on behalf of the employer,

(b) the extent (if any) to which the financial loss referred to in that subsection was attributable to an act, omission or conduct by or on behalf of the employee,

(c) the measures (if any) adopted by the employee or, as the case may be, his failure to adopt measures, to mitigate the loss aforesaid,

(d) the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the procedure referred to in subsection (1) of section 14 of this Act or with the provisions of any code of practice relating to procedures regarding dismissal approved of by the Minister,

(e) the extent (if any) of the compliance or failure to comply by the employer, in relation to the employee, with the said section 14,

(f) the extent (if any) to which the conduct of the employee (whether by act or omission) contributed to the dismissal. 

3) In this section—

“financial loss”, in relation to the dismissal of an employee, includes any actual loss and any estimated prospective loss of income attributable to the dismissal and the value of any loss or diminution, attributable to the dismissal, of the rights of the employee under the Redundancy Payments Acts, 1967 to 1973, or in relation to superannuation;

“remuneration” includes allowances in the nature of pay and benefits in lieu of or in addition to pay.

Having decided that the Complainant was unfairly dismissed, I must now examine the appropriate form of redress in accordance with section 7 (1) of the Act set out above. I note the Complainant’s preference for compensation as a remedy and find that this is appropriate in this instance.

In calculating the level of compensation to award, I have regard to the decision of the Adjudication Officer in ADJ 32667, where she stated, inter alia, that: 

“in considering compensation, regard must be had to all of the subsection of Section 7-and the tests are not confined to the efforts of the former employee-or the Complainant in this case. In circumstances where the Respondent is found not to have met the tests set out in subsections (c) and (d) …. and the Complainant made no contribution to the decision to dismiss her under (a) (b) or (f) It would be wholly unjustified to penalise the Complainant solely for a conclusion that she did not make a sufficient effort of mitigate her losses where the balance of unfairness and failure to comply with the terms of Section 7 as a whole lie squarely with the Respondent.” 

Having regard to section 7(2)(a), I find, as outlined above, that the Respondent acted unreasonably in inadequately consulting with the Complaint. However, I acknowledge, as Mr. O'Mahony highlighted, that there was some degree of consultation with her, and I believe that the notification of redundancy should not have come as a significant shock to her at the time. I have duly considered and incorporated these factors into my award.

Having regard to section 7(2) (b) and (f), I also note that the Complainant was dismissed on the grounds of redundancy and therefore made no contribution to the termination of her employment. Furthermore, I determine that section 7(2)(d) and (e) of the Act do not apply in this case due to the dismissal being based on redundancy. Considering section 7(2)(c), it is worth noting that the Complainant registered with only one employment agency after her dismissal and provided little evidence of actively seeking available positions either directly or through other agencies. Consequently, based on the inadequate efforts made by the Complainant to mitigate her losses, it is my finding that her attempts to mitigate her financial loss were insufficient.

Having regard to all of the foregoing, I make an award of €6,750 in respect of the unfair dismissal. For the avoidance of doubt, this is in addition to the statutory redundancy payment that the Complainant has already received. I should highlight that I have considered Mr. O'Mahony's argument in his supplemental submission that, due to a genuine substantive redundancy in this case (which I accept), it would be fair and reasonable to offset any redundancy payment made against any compensation award payable. However, upon careful examination of the legislation cited in section 7(3) above, I am of the view that actual loss, prospective loss, and a redundancy entitlement constitute separate and distinct categories of loss.  Specifically, the calculation of actual and prospective loss is based on the loss incurred from the day of the dismissal. On the other hand, the redundancy lump sum entitlement, earned from accrued service, begins on the day an employee commences their employment and ends on the day that the employment is terminated. It, therefore, falls under a distinct category of loss and cannot be offset against the compensation award related to the dismissal.